Hire Purchase (HP)
Traditionally the most common type of finance scheme, Hire Purchase is simply a form of hire whereby you end up owning the car at the end of the agreement.
The main benefit of HP finance over high street lenders and banks is the fact that the agreement is secured on the car and not you as an individual. This also means that you are protected under current consumer legislation in the event of a dispute as the finance company has an interest in the vehicle.
You cannot sell the vehicle whilst it is subject to a Hire Purchase agreement and the finance agreement will be recorded on the HPI register. You can part-exchange a vehicle that is subject to hire purchase as long as the settlement amount is paid off by the dealer. All you need to do is obtain a current settlement from the lender at the time of sale.